2022 AGM and NOM Season – What to Expect

Corporate News - 29 August 2022

After two years of the COVID-19 pandemic and a raft of temporary and permanent changes to the Corporations Act 2001 (Cth) (Corporations Act) affecting the ability to hold hybrid and virtual meetings and sending notices of meeting electronically, we set out in this article a summary of where things currently stand for companies due to hold their annual general meeting (AGM) in the coming months.

Hybrid and wholly virtual meetings
Hybrid AGMs with both a physical venue and online participation can still be held. However, companies can now only hold a wholly virtual AGM if the company’s constitution expressly permits or requires this. This means that companies who do not already have an express provision in their constitution will not be able to hold a wholly virtual AGM this year. In such cases, we strongly recommend that shareholder approval be sought to amend the constitution at this year’s AGM to allow flexibility for future meetings.

A person who attends a meeting, whether at a physical venue or by using virtual meeting technology, is taken for all purposes to be present in person at the meeting while so attending.

Shareholder participation
Shareholders, as a whole, must be given a reasonable opportunity to participate. This includes holding the meeting at a reasonable time and place and ensuring that shareholders can ask questions and make comments both orally and in writing. To comply with this requirement for hybrid and virtual meetings, larger companies may consider engaging a dedicated platform provider and smaller companies may rely on free online conferencing software. In both cases, companies should establish contingency plans in the event of technology failure during the meeting.

Sending meeting documents
Companies are permitted to send notices of meeting and meeting related documents to shareholders either physically or electronically (either by attaching them to an email or providing a link to them) regardless of the format of the meeting. However, members can elect to receive those materials in their preferred format (i.e., physical or electronic copies), provided the election is made within the required timeframes under the Corporations Act. Companies and their share registries will need to keep track of what elections have been made by shareholders and ensure shareholder email addresses are held if documents are to be sent electronically. In addition, each financial year the company must notify shareholders of their right to make these elections (this can be done via the company’s website). Shareholders also have the right to make ad hoc requests to be sent particular documents in physical form or electronically (again, subject to certain rules on timing) and can also elect not to receive annual reports.

Substantive resolutions by poll
Substantive resolutions for listed entities will need to be conducted by way of a poll, in line with ASX corporate governance requirements for listed entities.

Signing proxy forms
A document relating to a meeting, such as a proxy form, may be signed electronically if the method identifies the person signing, their intention in respect of the information recorded in the document and the method is reliable as appropriate for the purposes for which the information was recorded.

Independent scrutineer
Shareholders of a listed company with at least 5% of the votes can request to have an independent person appointed to observe the conduct of a poll, or to scrutinise the outcome of a poll, and prepare a report.

Practical tips and reminders

  • Start AGM preparations early to ensure that relevant virtual/hybrid meeting procedures and processes are in place and will facilitate members’ fair participation and a smooth meeting. Early engagement with the share registry to ensure that dispatch of meeting materials occurs in accordance with member elections will be key.
  • Establish a dedicated AGM area on the company’s website with sufficient details of arrangements and ensure this is kept as up to date as possible. The website should also include notification of shareholders’ rights to request documents in a particular form.
  • Technology used for hybrid or virtual meetings must enable recording of who is present, both oral and written engagement and real-time voting. In addition, the Chair should be armed with clear guidance on what is to occur in the event of technology failure.
  • Bear in mind timing considerations:
    • listed entities need to ensure the closing date for receipt of director nominations is announced at the appropriate time in accordance with the ASX Listing Rules and the company’s constitution;
    • any Listing Rule resolutions will need to be submitted to ASX for review before dispatching to shareholders. Typically, ASX’s review requires 5 business days but complex resolutions or transactions may require further time. In addition, any notices of meeting (NOM) with related party resolutions will need to be submitted to ASIC for review which can take up to 14 days (although an application to shorten the review period can be made subject to a fee); and
    • AGMS for listed public companies with a financial year of 30 June will need to be held by 30 November 2022 (now that earlier ASIC relief has expired). This means that the NOM will need to be finalised and sent to shareholders by the end of October 2022. Unlisted public companies have an additional month to hold their AGM (i.e., by 31 December 2022) by virtue of recent ASIC relief. Common issues and resolutions to consider include financial benefits to related parties, director elections, director remuneration, issues of securities and incentive plans, and amendments to the constitution.
  • Consider including a resolution approving a new employee securities incentive plan in light of the upcoming changes to the Corporations Act due to take effect from 1 October 2022 (further details of which are set out in our article sent to clients last week and accessible here).

As always, we are happy to assist all clients with preparing or reviewing AGM materials for the upcoming season so please contact us in our Perth office or Melbourne office for further advice by clicking here.

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